Quebec's Lithium Chain Pulls Apart

The lithium ETF LIT closed April at $88.24. On Thursday it stood at $59.43 at Thursday's close, after a session in which it dropped 2.69%. In between, Asian spot lithium carbonate fell to $12.90 per kilogram from more than $25 in May, BMO said Thursday, citing Fastmarkets.

That slide is pulling Quebec's lithium industry in two directions. In Bécancour, a plant that is most of the way built has stopped. In James Bay, a mine that is not built at all has just reported far better numbers. Stake & Paper's Staking Report data rests on BLM federal records and cannot see Canadian ground, so this story rests on prices, filings and company studies. The question for both projects is the same: whose price forecast is right, and who has to commit money before the answer arrives.

A plant on pause

Construction of Rio Tinto's Nemaska plant is set to remain on hold through 2027, putting its planned 2028 start in doubt, Le Journal de Montréal reported, as relayed by MINING.COM. Employees were told Wednesday that work could resume in 2028, though the company letter did not confirm it. The Quebec minister's office had already confirmed 68 layoffs running through December. The longer pause raises questions about the return on C$1.2 billion ($846 million) of public money, Le Journal de Montréal said, per MINING.COM.

The plant was "more than 70% advanced" when Rio Tinto said so in March, according to the company's release. At the time the company said the slowdown "does not reflect any reduction in commitment from Rio Tinto or from the Board of Nemaska Lithium". Rio took direct control in February after raising its stake to 54%; Quebec holds the other 46% through Investissement Québec. In that deal Quebec committed up to $200 million in new equity and Rio pledged more than $300 million for its Quebec lithium business in 2026.

CTV News, via CP24, reported on 11 November 2026 that much of the heavy machinery at the Bécancour site is at a standstill after dozens of layoff notices. Quebec's new government said this week it would not spend a penny more for now, though the province owns 46.1 per cent of the company. Economic development minister Stéphane Paquet put the political bind bluntly: "I don't want to be the guy to write off the $1.1 billion we invested."

Locals have not given up. Regional prefect Mario Lyonnais told CTV News: "I am confident that the Nemaska plant will open." Bécancour had counted on 1,500 direct and 5,000 indirect jobs from battery plants in its industrial park.

Rio said decisions on further investment and timing depend on its evaluation, project economics, market conditions and customer needs, and that it remains confident in Quebec's long-term lithium processing outlook. It is also reviewing the plant's long-term spodumene supply, weighing Whabouchi against its wholly owned Galaxy project. BMO said Thursday that choice remains unresolved.

A mine on paper

A very different price deck sits behind PMET Resources' Shaakichiuwaanaan project. The updated feasibility study for its CV5 deposit shows an after-tax NPV at an 8% discount rate of about CA$5.10B (US$3.72B), with an IRR near 40.4%, at a long-term spodumene price of US$1,788 per tonne. The Northern Miner reported that the study "more than tripled" the project's expected value by adding tantalum recovery and a higher lithium-price assumption. Its earlier lithium-only plan carried an after-tax value of about $1.6 billion and an 18% IRR.

The price assumption does much of the work. The Northern Miner said the assumed $1,788 per tonne compares with $1,221 in the previous study, a 46% increase. PMET says every US$100 per tonne change in the price moves NPV by about CA$465M. At near-consensus broker pricing of about US$1,400 per tonne, NPV is about CA$3.29B (US$2.40B). PMET also said a recent spot price of US$1,305 per tonne on October 26, 2026 is "not considered representative" of long-term forecasts.

Management leans on Benchmark's third-quarter base case, which sees near-term deficits, surpluses from 2028 to 2034 and deficits again from 2035. A binding term sheet with PowerCo, a Volkswagen subsidiary, covers 100,000 tonnes a year over 10 years, but only if the mine is commissioning by June 30, 2031.

The Northern Miner reported that PMET is targeting a final investment decision in late 2027, commissioning in late 2029 and commercial production by the end of March 2030, depending on financing and regulatory approvals. The Northern Miner also reported that Volkswagen holds 9.5% of the developer.

The stock was less dazzled than the spreadsheet. The Northern Miner reported that PMET shares gained 4% to $3.35 on Wednesday morning in Toronto, valuing the company at $622.9 million, within a 12-month range of $2.96 to $7.81.

Chile's forecast

Chile's copper commission has now weighed in against the near term. Cochilco said Thursday that the global lithium market will close this year with a deficit of 79,000 tonnes, while 2027 will show a surplus of 42,000 tonnes, Reuters reported via MINING.COM. Chilean output is expected at 325,000 tonnes this year, after 311,000 in 2025, and to reach 335,000 tonnes in 2027, up 3.1%.

Demand is not collapsing. EFE, via Infobae, reported that Cochilco puts global demand in 2027 8 % above this year's projection. Supply simply grows to meet it. BMO blames weak demand growth and expanding supply from Africa and China for the price slide.

China's market shows no urgency to reverse. Shanghai Metals Market said battery-grade lithium carbonate averaged 90,450 yuan per tonne on November 11, down 800 yuan from the previous trading day. The most-traded GFEX contract, LC2701, settled at 88,460 yuan, and spot prices are expected to keep pulling back in the short term.

Cochilco's surplus lands in 2027. Benchmark's, as PMET cites it, begins in 2028. PMET's investment decision falls in late 2027, between the two. Rio, with its plant mostly built, can afford to wait for the market to decide. PMET's financing hangs on the price deck holding. One project has the concrete. The other has the forecast.